CFPB announces consumer reporting rulemaking

Federal Issues CFPB Medical Debt Agency Rule-Making & Guidance

On September 21, the CFPB announced the beginning of its anticipated rulemaking regarding consumer reporting, including a proposal to remove medical bills from credit reports. This announcement builds upon a hearing the CFPB held in July 2023 on medical billing and collections, highlighting its range of negative impact on marginalized communities (covered by InfoBytes here). In the CFPB’s announcement, Director Rohit Chopra emphasized the inconsequential “predictive value” of medical bills in credit reports despite their prevalence in American households, thus the agency's goal is to alleviate the burden on individuals facing medical debt. The Bureau’s press release highlighted components to its outline of proposals and alternatives under consideration, such as (i) prohibiting consumer reporting companies from including medical bills in consumers’ credit reports; (ii) prohibiting creditors from relying on medical bills for underwriting decisions; and (iii) prohibiting debt collectors from leveraging the credit reporting system to pressure consumers into paying their debts. The rule would not prevent creditors from accessing medical bill information, such as validating need for medical forbearances, or evaluating loan applications for paying medical debt.

In addition to the proposed removal of medical debt from consumer reports, the Bureau’s outline includes other notable proposals regarding consumer reports. The Bureau’s proposals include:

• As previously covered by InfoBytes, applying the FCRA to data brokers by altering the FCRA definitions of “consumer report” and “consumer reporting agency”, to “address whether and how the FCRA applies to newer actors and practices in the credit reporting marketplace, including questions such as coverage of data brokers and certain consumer reposting agency practices regarding marketing and advertising.” In particular, the Bureau is also considering a proposal that would provide that data brokers selling “consumer reports” containing consumers’ payment history, income, and criminal records would be considered a consumer reporting agency. The Bureau is also exploring clarifications on when data brokers qualify as consumer reporting agencies and furnish consumer reports.
• Clarifying whether “credit header data” qualifies as a consumer report, which could limit the disclosure or sale of credit header data without valid reasoning.
• Clarifying that certain targeted marketing activities that do not directly share information with a third party nevertheless are subject to the FCRA.
• Proposing a definition of the terms “assembling” and “evaluating” to include intermediaries or vendors that “transmit consumer data electronically between data sources and users.”
• Clarifying whether and when aggregated or anonymized consumer report information constitutes or does not constitute a consumer report. Specifically, the Bureau contemplates providing that a data broker’s sale of particular data points such as “payment history, income, and criminal records” would “generally be a consumer reports, regardless of the purpose for which the data was actually used or collected, or the expectations of that data broker
• Establishing the steps that a company must take to obtain a consumer’s written instructions to a obtain a consumer report.
• Addressing a consumer reporting agency’s obligation under the FCRA to protect consumer reports from a data breach or unauthorized access.